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SDI Withholding Rate Increase
January 2001
Sacramento, California – Effective January 1, 2001, the state disability
Insurance (SDI) withholding rate will increase from 0.7% (.007) to 0.9% (.009).
The SDI taxable wage limit will remain at $46,327
per employee with a maximum weekly benefit of $490.00 for the calendar year
2001.
Since 1946, the California Unemployment Insurance
Code has required that all employees working in California (except for
employees of government division, religious organizations, and other
miscellaneous groups) must participate in a state audited and regulated
short-term disability income replacement plan.
Currently, employers can satisfy their obligation
to make this coverage vailable to their employees in one of two (2) ways:
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Employers can have employees participate in the state plan
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Employers can establish a private self-insured plan, known as "self-insured
voluntary plans" under the Unemployment Insurance Code
Significant advantages to self-insuring SDI
benefits are that employers can control the administration of the disability
claims and integrate the SDI benefits seamlessly with their sick pay, salary
continuation, short-term disability and long-term disability benefits. In
addition to these administrative advantages, the cost savings to employers for
having control over the self-insured SDI benefits and closer coordination of
other disability benefits, can be as much as 25% to 30% of the costs when these
benefits are not self-insured.
About VPA, inc.
VPA, Inc. is the largest administrator of
self-insured SDI plans. Employers looking for opportunities to improve their
absence and disability benefits plans should contact VPA at 800-473-9761 or
email sales@VPAinc.com, for a free
feasibility study to determine the potential cost savings to self-insuring.
Additional information is also available on our website at
www.VPAinc.com.
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